Further consolidation is underway in the world of payments: Prosus – the Dutch tech giant that brings together fintech, e-commerce and other international investments and businesses of Naspers outside of South Africa (including a stake major in Tencent) – today announced that it will pay $ 4.7 billion to acquire BillDesk, a payments provider in India. Prosus plans to combine BillDesk with PayU, its current global fintech and payments business, which already has a strong presence in India. The deal has been rumored to be in the works since about July.
The acquisition will make PayU one of the largest online payment providers in the world with some $ 147 billion in payment volume per year. But the acquisition is not only an important consolidation movement in the world of payments: it also underlines Prosus’ continued attention to developing markets and in particular to India. Prosus said the deal – one of the largest ever for Prosus and one of the largest M&A moves in India – will give its fintech holdings in India a cumulative investment value of 10 billion dollars.
This is part of a long-term strategy for Prosus (and Naspers) that dates back almost a decade and involves a number of other acquisitions and investments in startups in the region.
“Payments and fintech is a key segment for Prosus and India remains our number one investment destination,” said Bob van Dijk, CEO of Prosus Group, in a statement. PayU – formed from a combination of various interests in FinTech and payments that Naspers (then Prosus) had acquired over several years, is currently active in around 20 markets.
India represents a huge market for financial services, with a digitally savvy consumer base with a rapidly expanding middle class with disposable income.
In this context, PayU has positioned itself as a strong player. Specifically, it has been very competitive in the Indian online merchant acquisition market, both in terms of price and field sales effort. PayU India has a dominant stake in the payment gateways sector, where it has traditionally competed with BillDesk and CCAvenue (partly owned by Infibeam).
BillDesk has been around since 2000 and its investors included Visa, General Atlantic, and the State Bank of India. PitchBook estimated its valuation to be around $ 1.53 billion in 2019 when it was last raised. Tracxn estimated that the founders still owned just under 30% of the company before this acquisition.
BillDesk is among the companies that have applied for the license of NUE, a proposed new retail payments network for India that is expected to compete with established UPI railways. BillDesk partnered with Amazon, ICICI Bank, Axis Bank, Pine Labs and Visa for the license.
“We believe this transaction will stimulate both innovation and competition within the Indian digital payments industry,” Laurent Le Moal, CEO of PayU, said in a statement. “This will not only help strengthen India’s digital economy, but also bring financial services to those who may have been historically excluded. This ambition is fully aligned with the Indian government’s vision of “digital India” and is a key goal for PayU in all the communities we serve around the world. “
PayU said today that its domestic and cross-border payments business in March 2021 was up 51% year-over-year in its operations in India, Latin America and the EMEA region, a brand of the global boom that we have seen in global digital. payments market following the Covid-19 pandemic.
Other businesses operated by PayU include credit solutions in India and five other markets. Prosus itself is also an active investor, with stakes in money transfer company Remitly and others representing a pipeline of strategic partnerships, but also potentially future acquisitions.